Daytona's Big Events Bust City's Budget

When Spring Visitors Check Out, An Audit Found, The Taxpayers Are Left To Cover The Costs.

February 10, 2002|By Rich Mckay, Sentinel Staff Writer

DAYTONA BEACH -- More than a million visitors will flood the World's Most Famous Beach this spring with stock-car fans, Viking-helmeted bikers and college kids flashing skin for colored beads.

What they have in common, however, is cash that stuffs the pockets of local merchants with as much as $1.3 billion. Those same visitors leave Daytona taxpayers footing a bill of $2.2 million just for police, trash pick up and portable toilets.

To the working-class residents, it's like agreeing to split the check on dinner with a wealthy uncle and then getting stuck with the bill.

It's a politically-radioactive issue because the local politicians don't want to alienate the business community. Neither do they want a revolt by taxpayers who already pay the second highest municipal tax rate in the county.

The disparity became news when a recent audit showed just how deep the financial hole is in the city.

The city had to dip into its savings for more than $2 million so it could pay bills and salaries.

The auditors blamed special events, a conclusion city leaders hotly contest.

The city does collect money, in some fashion, from all of the special events, largely through vendor permits, rentals of the city parks or fees for closing streets. There is even a $50 sanitation fee per vendor.

That money is used to pay for police, fire and other services.

Events that draw a lot of outdoor vendors and require street closings bring in the most money.

Bike Week generated $237,000 in various fees to the city. But even that event costs the city nearly twice as much -- $527,500 -- mostly to pay for police overtime and clean-up services.

The city takes in far less for other events that don't generate as many vendors, such as Black College Reunion.

The reunion generated $24,000 in fees last year, but it cost the city more than any other event -- $755,700. Most of that is paid to the 730 police officers -- many from other agencies -- who direct traffic during the car-choked event.

GETTING THE MONEY BACK

How the city can recoup more of its money is a mystery.

One idea is to dramatically increase the fees charged to vendors who set up booths during special events.

In the food chain of consumer finances, any increase a merchant pays gets passed on to the customer.

Ultimately, that means coming to Daytona Beach next year could be more expensive, whether it's through higher ticket prices, pricier T-shirts, steeper room costs or tabs loftier than the $4-a-beer folks already pay at the Speedway.

POLITICAL RAMIFICATIONS

Politicians have to tread lightly, though.

Their fear of alienating businesses was evident last month when the auditors from the Tallahassee firm Government Services Group Inc. presented the findings.

The report, which cost $48,000 to prepare, zeroed in on special events as the source of city revenue losses.

That finding was decried by the City Commission, and Mayor Bud Asher swiftly formed a special committee of hand-picked residents and city workers to hunt for another explanation for the city's money troubles -- something other than special events.

"You have to understand before you write anything that this isn't about special events," Asher told a reporter.

The politicians are putting distance between themselves and the audit report -- so much so that whenever they're asked about the audit they immediately heap praise on the special events, calling them "our life's blood."

The city recently took a baby step toward closing that $2.2 million gap.

City commissioners tacked on an extra $300 "administrative fee" for out-of-town vendors coming to Bike Week 2002 in March. Paul McKitrick, the city's permit director, estimates this will bring in another $70,000.

Meanwhile, the City Commission passed up a chance to make about $5,000 more on Black College Reunion by declining to sell permits for more out-of-town vendors who come in for the April weekend.

City Commissioner Charles Cherry, a former head of the local National Association for the Advancement of Colored People, labeled the proposal foolhardy, because the city needs money, and racist, because the city seems to be discouraging an event attended almost exclusively by blacks.

The majority of the commission said it was better to wait until 2003 to take up the issue.

NO TOUCHING SPEEDWEEKS

For the most profitable event, Speedweeks, there hasn't been any public talk of raising any of the city's fees, which generate about $79,000 -- far short of the city's cost of $567,000 -- mostly for police directing traffic.

In 2000, the Daytona 500 generated $240 million for the local economy, according to SportsBusiness Journal.

The racetrack's sway in the city is visible. At a city workshop last month on the budget, a meeting where the general public isn't allowed to comment, International Speedway Corp. President John Graham was given the microphone.

Graham labeled the audit flawed and inaccurate because it did not take into account all of the money the Speedway generates for the local economy.